MTN Nigeria pays $ 66.36 million license fees, wins 4G/LTE auction

The Nigerian Communications Commission (NCC) has declared MTN as winner of its latest auction for a ten-year frequency spectrum licence for the 2.6GHz band, which guarantees superior performance for wireless networks, especially 4G LTE services.

The NCC had earlier confirmed that ‎MTN’s bid was in full compliance with the relevant provisions of the Information Memorandum (IM) for the exercise in which MTN emerged as sole approved bidder.

Although Nigeria is one of 28 African countries that currently offer 4G/LTE services, the rate of penetration is restricted to a few major cities. As such, MTN’s success in this auction is a big boost to its plan to deliver global mobile broadband and LTE 4G services to over 60 million customers in Nigeria.

MTN also plans to use FDD networks in addition to its existing WIMAX over TDD networks, as this provides for greater consistency with existing 2G and 3G deployments.

MTN Nigeria CEO Ferdi Moolman said: “After complying with all the requirements for the 2.6GHz auction and making the licence payment of N18.96 billion (US $ 66.36 million) to the NCC, MTN has been issued a letter of award. With the 2.6 GHz band, we expect to roll out and provide the full range of LTE services to Nigerians, empowering Nigeria with the latest mobile broadband technology.”

The award of the spectrum by the NCC followed an open, transparent and competitive process in which all operators – local and foreign; enjoyed equal and unfettered rights of participation in line with the NCC’s desire for transparency and ensuring a level playing field for all. The NCC has described this spectrum as a significant trigger for a broadband revolution that will unlock benefits such as greater coverage, access, affordability and innovation, with the customer at the centre of these gains.

Studies by McKinsey have shown that a 10% increase in broadband penetration is associated with a 1.4% increase in GDP growth in developing markets. As such, the knock-on effect on individuals, businesses and multiple sectors of the economy signal far reaching implications for socio-economic growth and development.

According to MTN’s Ferdi Moolman, “We are very pleased with this development at this time, which is a further step in the right direction for Nigeria. Indeed, MTN is fully aligned and supports the NCC’s objective to deliver broadband services to present and future generations of subscribers, in line with the National Broadband Plan of 2013.”

He added “This license acquisition further demonstrates MTN’s abiding faith in the future of Nigeria and the resilience of the Nigerian economy. MTN continues to believe in Nigeria and we have expressed this belief in the level of our investment, which currently stands at approximately US $15 billion and counting. We strongly believe that there is need for significant levels of investment in broadband infrastructure and services to truly launch Nigeria into the information age. We are honoured to be the arrowhead.”

“In addition, we are also delighted that the matter of the fine imposed by the NCC was amicably settled in the interest of all parties. I am pleased to announce that the first payment of N30 billion in the terms of settlement has already been disbursed to the NCC. In addition to the earlier payment of N50 billion (US $175 million) which we paid in good faith and without prejudice on February 24, this means we have now paid a total of N80 billion (US $280 million).”

In addition to aggressive investment, MTN has also built the most extensive private fibre optics superhighway in Africa and the Middle East, covering approximately 16,000 kilometres, which is longer than the distance from Indonesia (Asia) to Argentina (South America).

For Ferdi Moolman, the 2.6GHz acquisition has set the stage for the roll-out of 4G LTE broadband internet services across the country, starting in the major cities of Lagos and Abuja.

In his words “Our subscribers, especially those in clustered areas such as the major cities, can expect distinct improvements in browsing speed, quality and experience. This means that they will have fast access to high definition video streaming, as well as conferencing and calling, lag-free music streaming, and improved data uploads and downloads”.

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